Alexion is reorganizing R&D, axing 600-plus jobs and moving HQ to Boston as execs prep deal spree
The new crew in charge of Alexion $ALXN is pulling up stakes from New Haven, CT and moving its headquarters to the big biopharma hub in Boston/Cambridge. And the dramatic move will come with some big layoffs.
In a top-to-bottom revamp, Alexion CEO Ludwig Hantson announced plans to downsize R&D as it reorganized the pipeline. The biopharma company also plans to shutter a variety of facilities, including the Alexion Rhode Island manufacturing facility and “certain regional and country-based offices.” And it will spend up to $440 million in a shakeup that includes layoffs in the commercial group as well as administrative offices as it moves 400 jobs to Boston.
Alexion’s HQ is headed for a new office building under construction on the South Boston waterfront, where it’s taking 150,000 square feet. And the Boston Business Journal reports that it will shutter a location it has in Lexington, acquired in the $8.4 billion Synageva buyout — now largely written off as a bust of epic proportions.
In a call with analysts Tuesday morning, the CEO outlined plans to lay off 20% of its workforce, which would account for more than 600 staffers out of the 3,121 employed at the company at the end of 2016. The restructuring is designed to free up $250 million in annual spending, $100 million of which will be steered to new business development deals — an array of planned licensing pacts, partnerships and bolt-on acquisitions — as well as new trials for ‘1210 and other experimental therapies.
“It’s core for the strategy to rebuild the pipeline,” noted CFO Paul Clancy, who joined Alexion from Biogen two months ago. So you can look forward to a new stream of deals, most focused on Phase I and Phase II assets ahead of proof-of-concept data.
Alexion’s shares slid 1% in early trading trading.
Alexion is moving fast, planning to relocate 400 positions by mid-2018, while leaving 450 jobs in New Haven. It’s all part of a three-prong strategy that involves big changes in R&D, a new structure for facilities with more outsourcing on manufacturing — all playing out over the next 12 months.
“By streamlining our operations we will create a leaner organization with greater financial flexibility that is highly focused on delivering for patients, growing our rare disease business, and both leveraging our leadership in complement and pursuing disciplined business development to expand the pipeline,” said Hantson. “These types of changes are difficult and we recognize that they have a personal impact on people who have been dedicated to the mission of Alexion.”
Hantson took over as CEO at Alexion after a probe in the company’s marketing practices led to the quick exit of two top execs. He followed up by revamping the executive team and announcing a pipeline do-over, dropping ALXN1101 (cPMP replacement therapy) and ALXN6000 (samalizumab), looking for buyers to pick these therapies up. The biotech also punted an ambitious effort on a range of preclinical pacts with Moderna, Blueprint and Arbutus.
Alexion faces a serious challenge, relying for the bulk of its revenue on Soliris, one of the world’s most expensive therapies, with a weak pipeline to back it up in offering new drugs when its patents start to expire.
In the makeover at Alexion, Hantson evidently wants to return to Boston/Cambridge, where he based the spinoff Baxalta before Shire bought it out.